Green financing is a financial or economic measure that increases cash flow to stakeholders to prioritize environmentally sustainable outcomes. Various countries are in the global race to secure a consistent source of green financing, and Turkey is no exception. If anything, the government is rapidly leading, with the introduction of diverse green financing options, its peers on the path to sustainable development and environmental viability. Luckily, Turkey’s decision comes with substantial benefits. Here are some of the roles of green financing in turkey and its numerous benefits.
What are the Roles and Benefits of Green Financing in Turkey
1. Carbon Sustainable Economy
The World Bank has readily determined that Turkey has recently borne the burnt of climate change with more floods, droughts, and some natural disasters. Although the country has undertaken significant efforts to mitigate this problem, a little help from the financial sector through green financing may just be all it needs to curb the effect of climate change within the territory. Green financing provides enough cushion to embark on climate innovation, practices and technologies which will aid the energy transition from a carbon-intensive to a renewable one.
2. Decreasing Climate Vulnerability
It is important not to undermine the role of finance in climate change reduction and impact reduction. Intentional financial measures such as hedging instruments, green bonds, green stock indices and general green investment may prove vital to recalibrating the climate sector in Turkey. It can aid even the distribution of climate risks and climate-based assessment. A public-private partnership between the government of Turkey and other private stakeholders are also a one-way road to decreasing the country’s climate vulnerability
3. Transition to a Green Society
The benefits of green financing in Turkey will be glaring in its transition to a green society. The World Bank has actively pledged its support to the country’s attempt to transition. In 2021, a Memorandum of Understanding was undertaken between the World Bank, the United Nations, the International Finance Corporation, countries like France and Germany, and the European Bank for Reconstruction & Development to contribute in the form of $3.2 billion to the countries long-strategy to achieving carbon neutrality by 2053. Indeed, the marked attempts to transition to a green society by the Turkey, 17th global largest carbon emitter, must count for economic, social, and environmental benefits.
4. Provision of Financial Standing to all Stakeholders
Green financing awareness in Turkey recently has given stakeholders a leg to stand. It is expected to continue providing financial standing to interested individuals and organizations in green measures who are held back by little or no financial backing. A year ago, Turkey released guidelines on Green Debts Instruments and Green Lease Certificates to encourage green bonds in capital markets. The country also offered a 50% discount for issuing capital market instruments subject to the guidelines in tandem with international best practices and standards.
Turkey is slowly but surely advancing its movement to the point of carbon neutrality. The country has borne a significant natural disaster hit this year. However, given the country’s commitment to green finance and the support it has gotten from the international community, there is no doubt that it is set to be a frontrunner for green earth advancement.